Covid Threatens To Around India’s Aviation Industry


Covid Threatens To Around India’s Aviation Industry

The pandemic has dealt a body blow to India’s airlines, which had already been battling a broken pricing model and a domestic slowdown, writes the BBC’s Nidhi Rai in Mumbai.

“I have sold my house and moved into a small apartment because I could no longer afford to pay my home loan,” says a former pilot who wishes to remain anonymous.

The 38-year-old, who used to work for the state-run Air India, said he and his relatives were constantly harassed by the bank when he began defaulting on his payments.

“Bankers even came to my house and it was embarrassing for me. So I gave up my house in a distress sale. It was heartbreaking.”

There was a time when flying for Air India was a lucrative career. In 2011, senior pilots were earning as much as 10 million rupees which, at the current exchange rate, amounts to more than $135,000 or £103,000.

But the country’s flagship carrier is now bankrupt. It has been looking for a buyer for years – a prospect that has dimmed amid the pandemic, reportedly forcing the government to even consider wiping the airline’s $3.3bn debt-tag from the deal.

Air India is not the only one in trouble. Indian aviation – once a promising industry with aspirational jobs – has been floundering in recent years. Seven airlines, including Jet Airways, India’s oldest private carrier that was often hailed as a success story, shut shop in the past decade. And now Covid-19 is threatening the rest, compounding the effect of years of high fuel prices, heavy taxes, low demand and cut-throat competition.

Jet Airways employees hold placards as they raise slogans during a protest against delayed salaries and the current shutdown crisis outside Rajiv Gandhi Bhawan at Jor Bagh on May 21, 2019 in New Delhi, India.IMAGE COPYRIGHTGETTY IMAGES
image captionJet Airways staff demanded that the government save the airline before it went under

And it comes after a difficult year globally – in 2019, the grounding of the Boeing’s 737 Max aircraft due to technical issues and Airbus’ problems with its Pratt & Whitney engines hit airlines hard. Although lower aviation fuel prices offered some respite, it was not enough to recover long-term losses.

India currently has eight carriers, with Indigo leading the market. Air Deccan was the only airline which was forced to suspend operations in April, putting all its staff on leave without pay until further notice.

“Indian airlines are very precariously placed,” says Kapil Kaul, South Asia CEO of CAPA – Centre for Aviation, an industry organisation.

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The biggest challenge, experts say, is the slowdown in passenger traffic. India’s stringent coronavirus lockdown, which lasted more than two months, stopped all air traffic. Although airlines have begun operating again, far fewer people are flying and international traffic is still severely curtailed.

Domestic passenger traffic between May and September 2020 was 11 million, down from more than 70 million for the same period the previous year, according to ratings agency ICRA. Traffic is expected to remain low in 2021 as well, ICRA vice president Kinjal Shah says.

Covid Threatens To Around India’s Aviation Industry


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